Preamble

The House met at Eleven o'clock.

PRAYERS

[Mr. SPEAKER in the Chair]

Orders of the Day — INSOLVENCY SERVICES (ACCOUNTING AND INVESTMENT) BILL

Order for Second Reading read.

11.5 a.m.

The Parliamentary Secretary to the Board of Trade (Mrs. Gwyneth Dun-woody): I beg to move, That the Bill be now read a Second time.
The Insolvency Services (Accounting and Investment) Bill deals, I regret to say, with matters which a former Permanent Secretary of the Board of Trade once described as being almost devoid of intrinsic interest and yet of revolting complexity—an attitude with which I find myself in almost complete agreement.
It is concerned with matters incidental to insolvency law as contained in the Bankruptcy Acts of 1914 and 1926 and the Companies Acts of 1948 and 1967 ; it does not affect the substantive provisions of this law. The Bill is nonetheless necessary in that it fills a gap in the nature and amount of information available to Parliament as regards the general financial administration of insolvency, and relieves the Board of Trade of the statutory duty to avoid any part of the cost of the administration falling on public funds : for some years this duty has been shown to impose an impossible task.
In order to understand the changes which the Bill proposes, it is necessary to outline the present arrangements which it seeks to alter.
Trustees in bankruptcy and liquidators of companies in compulsory liquidations are required by the Bankruptcy Act 1914 and Companies Act 1948 to

pay money received by them into accounts kept by the Board with the Bank of England, namely, the Bankruptcy Estates Account and the Companies Liquidation Account. This money must be made available to meet the cost of administering the estates and to pay dividends to creditors and shareholders. Liquidators in voluntary windings-up are required by Section 343 of the Companies Act, 1948, where the liquidation has not been concluded within a year, to pay into the Companies Liquidation Account unclaimed or undistributed assets which have been held for six months.
Money in the Bankruptcy Estates and Companies Liquidation Accounts which is not immediately required for the day-to-day administration of the respective estates is handed over to the Treasury for investment in Government securities. Under Section 362 of the Companies Act 1948, money in a particular liquidation which is not immediately required for paying to creditors may be invested in Government securities at the risk of the particular estate. Also, under the same Section of the 1948 Act, any balance in excess of £2,000 which is not required for the liquidation may, upon the liquidator giving notice, be put on interest bearing account at a rate prescribed by the Treasury (at present this is 31% a year).
The interest earned by the Treasury on the investment of estate balances, less the amount credited by way of interest to company accounts as I have already indicated, is utilised, with the fees charged in the proceedings, towards the costs of the official insolvency services.
Fees are charged at various stages of the administration and they can be varied by statutory instrument made by the Lord Chancellor with the sanction of the Treasury. In practice the Board are also consulted.
Section 14 of the Economy (Miscellaneous Provisions) Act, 1926, provides that in fixing the scales of fees regard shall be had to the average aggregate of the costs of administration. For many years previously the income from interest and fees had covered the costs of administration. Since the early 1930's, however, deficits have been incurred, albeit at first of little consequence. In 1951, the Board having taken the view that it was impracticable


to increase fees, it was agreed that in order to close the gap the Treasury should transfer £5 million of insolvency funds from Treasury Bills to more remunerative long-dated Government securities. An additional £12 million was transferred in 1953.
As was reported by the Committee of Public Accounts for the 1957-58 Session, unexpectedly heavy demands by liquidators between 1955 and 1957 necessitated the realisation not only of all remaining Treasury Bills but of some long-dated Government securities. Owing to a fall in the market value of the latter, losses of over £1 million were incurred through sales by March, 1958.
The Committee noted that, while the 1926 Act required the Treasury to cause to be laid before Parliament an annual account of receipts and payments in respect of insolvency administration, there was no provision for its audit by the Comptroller and Auditor General, nor was there a requirement to include any record of the sums deposited with the Board or invested by the Treasury. The considerable investment losses were therefore not included in any account available to Parliament. In an attempt to remedy this position, the Treasury had. however, caused statements of the losses incurred to be included in the Forewords to the receipts and payments accounts for 1955-56 and 1956-57 which were laid before Parliament.
The Committee was concerned at the fact that, over a period of years, income had been insufficient to meet the costs of administration. It appreciated the difficulties of the Board in trying to reconcile its duty of safeguarding the funds entrusted to it with that of obtaining the greatest possible return on investment, and welcomed the intention of the Board to seek Parliamentary authority for its release from the obligation to match income with costs. It recommended that the opportunity be taken in the proposed legislation to provide for the presentation to Parliament of more informative accounts.
It had been hoped that the necessary legislation would have been introduced in the 1959-60 Session. This was not possible, and the relevant Bill had not in fact materialised by the time that the Committee of Public Accounts for 1968-69 met. That Committee saw no

adequate excuse for the long delay and strongly urged that amending legislation be introduced as soon as possible.
The Committee noted that, over the eleven years since the results were last reviewed, the annual deficit had increased as regards bankruptcy from £323,369 in 1957-58 to £952,402 in 1967-68, resulting in a cumulative deficiency of nearly £6 ¾m. for the period, despite an increase in bankruptcy fees as from 1st October. 1965. As regards companies winding-up, for which there had been no general fees increase since 1927, there were surpluses in 1958-59 and 1960-61 with fluctuating deficits in other years, resulting in a net deficit for the period of nearly £0-6m. The Committee thus concluded that over the eleven years there had been an overall deficit of some £7.3m. falling on the taxpayer, despite the statutory obligation to charge economic fees.
The Board, as they informed the Committee, had in the intervening years looked closely at the insolvency administration and, with minor exceptions which were remedied, had found it effective and efficient, despite a shortage of skilled staff. Such scope as there was for economy was taken advantage of.
The Committee regretted the failure of the Board and the Treasury over a long period to take effective steps to restrict the deficits. It noted that a review of fees was under way and recommended urgent action to increase fees and other income. It also recommended careful consideration as to the extent, if any, to which the costs of the service should fall on public funds : and that in future these matters should be kept under regular review. The Board has acted on this recommendation, and both companies winding-up and bankruptcy fees were substantially increased from 1st May, 1969. It will still not be possible, however, to achieve a balance between costs and income. The Board considers that the levels of fees are now as high as is consistent with the need to avoid discouraging creditors. debtors and shareholders from making proper use of the official services. The use of these services is aimed at ensuring an equitable distribution of available assets, investigation to uncover misconduct and punishable offences and the relief of debtors of the burden of their liabilities so that they may make a fresh


start in life. These desirable aims might not be achieved if the scales of fees were such as to take so large a proportion of the available assets as to encourage, for example, the use of strong-arm methods by particular creditors in preference to the regular procedures.
In the financial year 1968-69, fees income was £574,000. The effect of the recent increases in the scales of fees is likely to add some £100,000 annually to fees income.
Unfortunately, even when dividend income, which was running at £1,078,000 in 1968-69, is added, there is a significant shortfall in relation to the costs of the insolvency services which were just over £2½ million in 1968-69.

Mr. Michael Shaw: I understand that these figures were laid and instructed to be printed by this House in April of this year. Am I right in saying that they are still not available in the Vote Office?

Mrs. Dunwoody: I have a very detailed explanation of this if the hon. Gentlemen would like it now. Apparently, Section 15 ( 1) of the Economy (Miscellaneous Provisions) Act, 1926, requires that an account of receipts and expenditure on bankruptcy and companies winding-up proceedings shall be prepared and laid before Parliament within a month of the end of the financial year. However, I gather that it has never been possible since the Act was passed to prepare the figures for this account within the statutory time limit and that in consequence the account has been laid in dummy during April. The account for 1968-69 was laid in dummy on 17th April, 1969. Apparently, this has been a continuing practice because of the difficulty which one encounters with the laying in dummy of not wanting to give premature disclosure of information. It is not only this year that it has happened. Apparently, it is one of those practical difficulties which are encountered every time these results are produced.
I am in a position to give an even more detailed explanation, but I hope that the hon. Gentlemen will accept that that is the reason why it has been done in this way.
There is little prospect of containing or reducing the cost of the insolvency

services so long as the Board is required to investigate the affairs of debtors and companies. I would remind hon. Members that Parliament has emphasised the need for vigilance against fraud by giving the Board of Trade, by Section 109 of the Companies Act, 1967, very wide powers of investigation of companies generally, not only of those in liquidation. This power has facilitated the Board's work in this connection and will inevitably call for increases in staff ; but it is work which, by its very nature, cannot be directly productive of fees or income. I can assure hon. Members, however, that the Board will keep the whole situation constantly under review to ensure that the administration remains effective and efficient and that the net cost to public funds is no greater than the circumstances justify. To this end, the scales of fees will be reviewed again in 1970 and in later years.
The fees are calculated on an advalorem basis for the most part, the determining factor being in the main the assets remaining in the estate. One reason why the fees income has not been as buoyant as might have been hoped is that the amount of assets per case has tended to fall. This is presumably attributable to the comparative ease which debtors and companies find in shopping around for new suppliers when credit from their usual sources has dried up. Thus the inevitable collapse is staved off a little longer. The crunch comes when even these tactics do not avail, by which time most of the assets have been dissipated. I find that extremely interesting.
Before I leave this aspect of the matter. perhaps I should point out that Government Departments benefit from the official insolvency procedures by virtue of the Crown's preferential status (along, incidentally, with employees) as regards taxes, national insurance contributions etc. Thus the policy of not discouraging the use of the official insolvency services brings benefits to the taxpayer of an indirect kind.
I must now, against this background, outline the provisions of the Bill. In essence, it is concerned to :—
(a) Transfer the investment management from the Treasury to the National Debt Commissioners ;
(b) Improve the accounting and auditing arrangements ; and


(c) Abolish the statutory link between the costs and income of the insolvency services.
Clause 1 of the Bill provides for the creation of an Insolvency Services Investment Account to be kept by the National Debt Commissioners at the Bank of England. The Commissioners will receive into this Account and pay out of it sums previously paid to and by the Treasury. Clause 2 provides for the National Debt Commissioners to invest these sums in specified categories of securities. Thus the National Debt Commissioners will replace the Treasury as the investment managers of these funds ; this follows the practice in other similar circumstances.
Clause I also abolishes the Bankruptcy and Companies Winding-up (Fees) Account. This is the Account into which at present income from fees and investment is paid, and out of which the costs of the insolvency services are supposed to be met—I say "supposed" advisedly. Such an account is no longer appropriate, given the repeal—also provided for in Clause 1—of the statutory link between the costs and income of the insolvency services. In future the income from fees will be paid into the Consolidated Fund, though the Treasury intends to use its existing powers to appropriate the fees, wholly or in part, in aid of the Board of Trade Vote.
Clause 3 provides for the application of the income of the Investment Account. At present the income from the investments is paid into the Fees Account, but this Account is being abolished and the future arrangement will be that the income will be paid annually into the Consolidated Fund, after deduction of a sum, determined by the Treasury, to provide against the depreciation of the securities, together with the moneys necessary to meet the payments of interest to companies. In the event that the income is insufficient to provide this depreciation reserve and the interest payments, the shortfall will be met from the Consolidated Fund. The Clause also provides for recourse to the Consolidated Fund in respect of the liabilities of the Investment Account.
Clause 5 provides for the surrender to the Consolidated Fund of unclaimed dividends and indivisible balances arising

from estates in bankruptcy and companies in liquidation before a date determined from time to time by the Treasury. This date will be chosen on the basis that demands from creditors and shareholders in respect of the unclaimed dividends and indivisible balances are no longer likely to arise. Thus, the balance in the Board's accounts, together with the sums due to the Board from the Investment Account, will more nearly reflect the Board's realistic liabilities. The arrangement will not, however, affect the ability of creditors and shareholders to claim any sums to which they are entitled.
Clause 6 provides for recourse to the Consolidated Fund in respect of the Board of Trade's liabilities to estates of bankrupts and companies in liquidation. This arrangement is necessary to guard against the theoretical possibility that, due to the surrender of certain holdings to the Consolidated Fund under the provisions of Clause 5, the Bankruptcy Estates Account and the Companies Liquidation Account might not be able to meet all their liabilities. This is, however, a remote contingency.
Clause 7 provides for the preparation of annual statements of sums credited and debited to the Investment Account, and of the sums received into and paid out of the Bankruptcy Estates Account and the Companies Liquidation Account. The form and manner of these statements are to be as the Treasury may direct, and they are to contain such additional information as the Treasury may direct. The statements are to be forwarded to the Comptroller and Auditor General who will examine, certify and report on them and lay them with his report before Parliament. These arrangements are designed to meet the recommendations of the Committee of Public Accounts of Session 1957-58, to which the Committee of 1968-69 also drew attention.
Clause 8, together with Schedules 1 and 2, deal with consequential amendments and repeals and Clause 9 sets out the short title, the arrangements for bringing the Bill into operation and the territorial extent of the Bill.
I hope that hon. Members have been able to follow these somewhat intricate arrangements. I emphasise, first, that the Bill does not in any way change the duties of trustees in bankruptcy or liquidators of companies, nor the rights


and obligations of creditors and debtors ; and, secondly, that the Bill will not lead to any additional subvention of the insolvency services by the taxpayer, beyond that which would have been unavoidable anyway.
The Bill will, however, permit improved scrutiny by Parliament of the transactions carried out by Departments involved in administering the insolvency services, and will relieve the Board of statutory obligations with which it is no longer practicable to comply.

11.24 a.m.

Mr. Michael Shaw: I thank the Parliamentary Secretary for her full explanation of the Bill. This is admittedly a complicated matter and, although I have spent some years in accountancy, it is not a subject on which I have dwelt.
I was interested to hear the hon. Lady say that it was a matter devoid of interest. At present insolvency is, I am afraid, a matter of considerable importance and interest to many people. I suspect that the figures which she said had been declining—we will not be able to tell this until we get the record some time next year—will be found to be increasing. Although the figures which she gave to my hon. Friend the Member for Sheffield, Hallam (Mr. J. H. Osborn) earlier this week were interesting, I suspect that their significance is rapidly being lost.
It might help if I point out at the outset that my hon. Friends and I do not propose to divide the House on this matter. It is fair to say that we should do everything to assist the Bill's passage with some speed, though with some humility, for, as the Parliamentary Secretary said, both Labour and Conservative Administrations have not been obeying the law. That, whichever party is in power, is not a desirable state of affairs, and the quicker we remedy it the better.
The need for the Bill stems from the 1926 Act ; as the hon. Lady pointed out, that Measure reveals the optimism that existed in those days, when it was expected that this Government service should balance its books. The change that has come over our affairs in the intervening years is obvious. The 1926 Act was a bold attempt to see if the solvency service generally, as administered

by the Board of Trade, could balance—could pay its way, one year with another, as between the income it received from investments and fees and the expenditure of the Department.
It seems to have worked for some time, but over the years it was found impossible for the fees to make up the deficit on the account. Having established the law, an account had to be laid before Parliament each year, the intention being that Parliament should review the account to make sure that the Minister was carrying out his or her duty in balancing the books. Over the years the deficit mounted, until it reached the substantial sum, in respect of bankruptcies, of £6,727,965. The deficit for company wind-ups was somewhat less, at just over £500,000.
Something had to be done and the alternative was either to free the Board of Trade from the obligations which it had or to put the fees up to such an extent as to balance the books once again. Being rather old-fashioned, when I first looked at the problem I considered how it might be possible to balance the books. This was amplified in the evidence of the Public Accounts Committee. The more one considered the problem the more difficult it became to see how the service could be made to pay its way.
It is the practice in cases of insolvency where substantial funds are involved for outside experts to be called in to act as liquidators. Usually, therefore, it is only the poor old official receiver who gets landed with the job when very little can be realised and when there is usually the greatest burden of work involved. One is, therefore, bound to accept that there is little chance of this service balancing its books.
It must be realised, however, that this was appreciated more than 10 years ago, when it was recommended that a Bill of this kind should be introduced. I had better not say too much about that because both parties have been guilty of not having introduced such a Measure sooner. It seems that the severe strictures of the Public Accounts Committee this year have done the trick, so that we now have the Bill before us.
The Bill does three main things. First, under Clause 1(4) it does away with the necessity, which has been ignored for so


many years, for the Government to fix the fees at such a scale so as to balance the books on average each year. Therefore, I am glad to say that in supporting this small Measure we are in some sense assisting the hon. Lady to regularise her position.
Secondly, the Bill does away with the receipts and payment account which was necessary to show whether or not this balancing act had been done in a particular year. It is interesting to note that this account has been prepared each year. It has been submitted each year to Parliament in accordance with the law, and we as Members of Parliament have duly passed it without objecting to the fact that the Ministers had not carried out their duty.
The other interesting feature is that although this account was laid before Parliament each year there was no account of total receipts and payments in the Board of Trade's accounts on its insolvency service. This seems to be an anomaly. It was noted by the Public Accounts Committee, and it is being put right by Clause 7. Here, again, I believe with the hon. Lady that there is a substantial improvement in getting rid of an account which will not now be necessary and substituting for it under the Clause two further accounts which will have to be presented ; namely, an account of receipts and payments of the Board of Trade through its insolvency service—subsection (2)—and also an account of the National Debt Commissioners showing details of moneys placed with it for investment on behalf of that service.
The third main effect is that instead of handing over money to the Treasury, as was done in the past, the Board of Trade will hand it over to the National Debt Commissioners for investment. In the past, the Board of Trade has received money from the various trustees and liquidators although, in practice, not all their money goes to the Board of Trade —certain small sums are allowed to be left in the liquidators' accounts for small current expenditure. But in broad terms, it is so. Money over and above immediate requirements has been handed to the Treasury for investment by the Board of Trade, and it would appear that the Treasury has not always invested it—I will not say unwisely, which would be

unfair, but certainly not successfully, from the hon. Lady's account. It appears that it is now felt that perhaps the National Debt Commissioners might be more expert at investing money.
This raises an anomaly. From now on, instead of handing over the money to the Treasury for investment, the Board of Trade will hand it over to the National Debt Commissioners, who will put it in an account with the Bank of England to be called the Insolvency Service Investment Account and the Commissioners will invest it, but will invest it
&in accordance with such directions as may be given by the Treasury.&
As I say, at first reading there seems to be an anomaly here. First, control of the investment was taken away from the Treasury and given to the National Debt Commissioners, yet here we have the money being handed over to be invested in accordance with such terms as may be stated by the Treasury. I should like an explanation of that point.
As to the submission of accounts to Parliament, I offer the pious hope that as two accounts will now be presented to Parliament we shall, in future, read them and comment on them, and ensure that the law has been fulfilled.
My only other comment is that now, presumably, there will be no separate cost shown of the service as there has been heretofor in the annual accounts presented to Parliament. This means that if, in future, we seek to find out the cost of the service we shall have to look to the Board of Trade Vote for the details.
I emphasise the point already made by the hon. Lady. The effect of this Bill on the public is administrative only. It does not in any way affect the right of any creditor or shareholder. It does not alter in any way the rights and duties of liquidators and trustees. We on this side welcome this small Measure. We are glad that we are making legal what has been the practice of the hon. Lady and her predecessors for many years. I look forward to that happy domestic scene after the passage of the Bill when the Joint Under-Secretary of State for Health and Security, the hon. Lady's husband, can say to the Parliamentary Secretary to the Board of Trade herself, in the immortal words first used by a famous actress to an equally famous musical


comedy star who had just completed her first straight role: "Congratulations, darling. Legitimate at last."

11.36 a.m.

Mr. A. H. Macdonald: A small matter that I should be glad to have dealt with relates not to the technical provisions of the Bill but rather to the necessity for the Bill at all. Both my hon. Friend and the hon. Gentleman the Member for Scarborough and Whitby (Mr. Michael Shaw) said that the Bill comes after a certain amount of delay, if that is the right word, and I wondered when I read it whether it has come at a time when its necessity may have somewhat diminished.
The hon. Gentleman has a great deal of professional experience in this sphere which I cannot claim, although I have had some business connection with liquidation, but none at all with bankruptcies. He said that the Official Receiver is left only with the dregs, as it were ; that voluntary liquidations normally take place when there is something to be salvaged, and that therefore it is, perhaps, not surprising that the Official Receiver is hardly ever in a position to make a financial profit out of his transactions.
My experience is, and it is common knowledge, that the difficulties leading to either a voluntary or a compulsory liquidation very often arise because the liquidation comes too late, so to speak, and that if its necessity had been realised earlier it might have been possible to salvage something from the wreck. This occurred under the old system. when the balance-sheets of a large number of companies, particularly private and close companies, were a secret, and not visible generally to the public and to creditors. As a result, creditors allowed extensive credit which they would not have given had they been able to see the accounts.
Under the Companies Act—and 1 understand that further company legislation is to come forward—a great deal more publicity is available. Creditors are to some extent able to see how businesses are going and to judge more wisely the extent of credit they will allow. A posible conclusion from this position is that the incidence of liquidations, whether voluntary or compulsory, may be diminished and that those that take place may take place earlier, when it is pos-

sible to salvage something from the wreck of a company's hopes and fears. If that happens, is it not at least more possible than previously that deficits may begin to diminish rather than to increase? In that sense the necessity for this Bill is rather less than it might have been 10 or 12 years ago when the Public Accounts Committee first drew attention to this particular factor.

11.40 a.m.

Mrs. Dunwoody: I ask leave of the House to speak again in order to answer, not only the interesting points made by my hon. Friend the Member for Chislehurst (Mr. Macdonald), but a!so the hon. Member for Scarborough and Whitby (Mr. Michael Shaw). After his magnificent peroration, which has stolen a most unkind march on me, I cannot find a marvellous contribution with which to close my remarks.
Perhaps the hon. Gentleman will forgive me if I go into a certain amount of detail on this question about the National Debt Commissioners. The National Debt Commissioners are the recognised agency for the investment of funds of this type held by Government Departments. The Treasury. which is currently responsible for the investment, considers that me Commissioners have the necessary expertise more readily available. The hon. Gentleman was rather unkind to the Treasury when he said that it was not successful with its investments. The information available to the National Debt Commissioners is of such detail and such type that they will be in a better position to invest than is the Treasury.
The Insolvency Services Investment Account, which the National Debt Commissioners will maintain at the Bank of England will replace the two investment accounts, one for bankruptcy funds and one for companies liquidation funds, at present maintained by the Treasury. Arrangements will he made, however, for the Commissioners to identify within the new combined investment account the funds attributable to the two different sources so that it will be possible interalia to establish the respective amounts of dividend income attributable to the two sources. This point raises what might appear to be an anomaly, that we take this function away from the Treasury and


then say that the Commissioners can only perform it on the direction of the Treasury officially. That is because the National Debt Commissioners will be in a far better position to do this day-to-day investment work and at the moment the Treasury can invest only in Government Securities.
Subject to direction by the Treasury, the Commissioners will, under the Bill, be able to invest in any securities listed in Part II of Schedule I of the Trustee Investments Act, 1961. That part of the Schedule covers a wide range of fixed interest securities but it is the present intention of the Treasury that the Commissioners should be directed to limit investment to the following categories : (a) Government securities in the United Kingdom and Northern Ireland, (b) Government guaranteed securities in the United Kingdom and Northern Ireland, (c) the Agricultural Mortgage Corporation, (d) mortgage loans to local authorities and (e) local authority securities.
It should be noted that the powers in the Bill would not permit the Commissioners to invest in equities. The suggestion was made at the most recent P.A.C. meeting that such investment should be permitted. Equity investment which is usually suitable only for longer term investment—at least 10 years—would not be appropriate to funds of this type where overriding priorities are high yield and high liquidity. I hope the hon. Member will accept this somewhat detailed explanation of why the Bill is written in this way.
As to the points raised by my hon. Friend the Member for Chislehurst, would that this type of alteration were not necessary and that we were not in the position of having to come before Parliament to say that we have been flouting the law officially for a number of years. I was pleased that the hon. Member for Scarborough and Whitby did not venture on the wild seas of accusing only us of breaking the law because, as he said, his Government were also guilty. Although two wrongs do not make a right, all Governments in the recent past have felt that this was a continuing—not necessarily abuse—anomaly which needed to be put straight.
I tried to draw attention in my speech to the fact that I was very interested in the details of the contrary argument to

that raised by my hon. Friend. It is quite startling that more people are able to run longer lines of credit before they go bankrupt than has happened in the past. People go bankrupt for larger sums with smaller assets. This in itself contributes to the difficulties the insolvency services have been facing. This may tell us something about modern society—that people are able to obtain greater sums. This is not a situation I have personally experienced, but I have found that some people get away with it for a longer time than they did in the past.
The Bill is definitely needed. It will put right a situation which has been becoming intolerable. As my hon. Friend said, as we get more information about company affairs creditors will be able to take what action they deem necessary at an earlier point than they were able to in the past. To this extent increasing company legislation is of assistance. Nevertheless, we could not continue to have a major service provided by the Government running under a statutory obligation with which it was not conforming and flouting the wishes of Parliament. The Bill sets out to regularise our system. It will make an honest woman of me, as the hon. Member for Scarborough and Whitby said. I hope that it will be greeted with approval on both sides of the House.

Question put and agreed to.

Bill accordingly read a Second time.

Bill committed to a Standing Committee pursuant to Standing Order No. 40 (Committal of Bills).

Orders of the Day — INSOLVENCY SERVICES (ACCOUNTING AND INVESTMENT) [MONEY]

Queen's Recommendation having been signified

Resolved,

That, for the purposes of any Act of the present Session to amend the law with respect to the Bankruptcy Estates Account and the Companies Liquidation Account and the investment of balances therein, and with respect to the fixing and disposal of fees in bankruptcy and winding-up proceedings, it is expedient to authorise—
(1) the issue out of the Consolidated Fund of—
(a) any sums by which in any year the gross amount of the interest accrued


from the securities standing to the credit of any Account established under that Act is less than a sum determined by the Treasury to provide against the depreciation in the value of those securities plus the sums payable out of that Account in respect of interest due under section 362(4) of the Companies Act 1948 ; and
(b) any sums that may be required as a result of the insufficiency of that Account, the Bankruptcy Estates Account or the Companies Liquidation Account to meet its liabilities ; and
(2) the payment of any sums into the Consolicated Fund.—[Mr. Harper.]

Orders of the Day — COLLIERY WORKERS (INDUSTRIAL INJURIES)

11.47 a.m.

The Joint Under-Secretary of State for Health and Social Security (Mr. Brian O'Malley): I beg to move,
That the National Insurance (Industrial Injuries) (Colliery Workers Supplementary Scheme) Amendment (No. 2) Order, 1969, a draft of which was laid before this House on 29th October, be approved.
The Order amends the Colliery Workers Supplementary Scheme which was introduced in 1948 at the request of the coal mining industry. The scheme provides supplementary benefit for colliery workers, or their dependants, who receive benefit under the Industrial Injuries Acts for colliery accidents or diseases. The Scheme is administered by a National Committee comprising of equal numbers of representatives drawn from both sides of the industry. Contributions to this Scheme's fund are made by employers and employees only—there is no charge on the Exchequer or the Industrial Injuries Fund.
The present Order seeks to extend until 2nd June, 1970, the arrangements for a standstill on the rates of supplementary injury and disablement benefit made in previous Orders. As hon. Members will recall from earlier debates, detailed negotiations involving not only the future of this Scheme but other benefit schemes in the coal mining industry have been going on for some time. These negotiations have been between the two sides of the industry and are not ones in which my Department has played any part. Although I understand agreement has now been reached in principle on substantial changes to the various schemes, it has not been possible to tie up all the

loose ends and to draft all the detailed amendments to the various schemes in time for the changes to come into effect before the present standstill order expires on 2nd December. Both sides of the National Committee have therefore asked for this Order Extending the standstill to allow time for this work to be completed. An Order giving effect to the substantive changes as they affect the Colliery Workers Supplementary Scheme will of course be laid before the House in due course.

11.50 a.m.

Mr. Marcus Worsley: I do not suppose that when the hon. Member first became a Parliamentary candidate he foresaw that he would one day become a Minister and that the first thing he would do would be to put an Order before the House restricting the amount of benefit payable to injured miners. Nevertheless, we understand the reasons behind the proposition the hon. Gentleman has made, and I merely have one or two questions to put to him.
First of all, I do not quite understand the timing of these Orders. We had a debate almost exactly a year ago, on 21st November, 1968, with which the hon. Gentleman will be very familiar because many of the words he read out were more or less the same as those used then. On that occasion we postponed the operation of this Scheme until June, 1969. So I should like to ask the hon. Gentleman what has happened, what has been the situation between June and December, because I cannot trace an order extending the operation from June to December. That is my first question.
My second question is about the actual negotiations which have been going on—

Mr. Speaker: Order. We cannot, in debate on this very narrow Order, discuss negotiations which are taking place. This Order extends certain benefits for six months.

Mr. Worsley: I am grateful, Mr. Speaker, and I was not seeking to broaden the debate. It would seem to be useful, though, since the House is being invited to extend this scheme, if we could be given a little more information, not about details of negotiations which, I appreciate, are outside the scope of


this Order, but about the time scale. What does the hon. Gentleman anticipate it is likely to be? I asked his predecessor a year ago whether that would be the last time that such an extension would be asked for. Will this be the last time such an extension will be asked for? I think the House can reasonably ask this of the hon. Gentleman. One feels that these standstills are extremely unsatisfactory and should be brought to an end. Therefore, my second question to the hon. Gentleman is, can he give us an undertaking now that, rather than extend this Scheme once more, he will, before June, 1970, come to the House with a finalised Scheme to put this whole matter on a regularised footing?

Mr. O'Malley: If I may have the leave of the House briefly to answer the points which the hon. Gentleman has raised. First of all he asked about the last Order which was moved in the House on this subject. I would advise him that it was moved by my hon. Friend who preceded me in this job on 19th May ; it took us up to the beginning of December. This Order, as the hon. Gentleman realises, goes on till June of next year.
The hon. Gentleman asks, will this be the last time? I would certainly expect it to be the last time because, as he knows, there have been lengthy and detailed discussions on a whole range of items, of this and similar kinds, between the National Coal Board and the trade unions concerned. They have, I understand, reached provisional agreement on this, and a ballot has been held by the N.U.M. on this subject. I understand that one of the other unions has to finalise its position with reference to the provisional agreement which has been made. Nevertheless, all the indications are that this will certainly be the last time when we shall be moving a standstill order of this kind in this situation, since the negotiations have moved beyond their final stage and should be ratified by the unions concerned.
I close by saying very seriously to the hon. Gentleman, of course one understands the point of view of the disabled miners and their families in the coal mining districts. I come from one of those districts and was brought up there.

Nevertheless, a scheme has emerged from the negotiations which have taken place between the unions and the National Coal Board, and the hon. Gentleman realises that the standard of benefit from State schemes has risen very substantially since the time when this Supplementary Scheme was first introduced after the war. Nevertheless, I take his point on the standstill Orders which have appeared in the House in the past. They have, as I have explained, arisen from the fact that negotiations between the unions and the Coal Board have been lengthy. Nevertheless, these negotiations have now apparently been concluded, and one would hope that the next order which we may be bringing before the House will be to implement any proposals which may be made in a satisfactory settlement, and which we may need to put into effect.

Question put and agreed to.

Resolved,

That the National Insurance (Industrial Injuries) (Colliery Workers Supplementary Scheme) Amendment (No. 2) Order 1969, a draft of which was laid before this House on 29th October, he approved.

Orders of the Day — STATUTORY INSTRUMENTS

Ordered,

That Mr. Walter Clegg be discharged from the Select Committee on Statutory Instruments and that Mr. David Waddington be added to the Committee.—[Mr. Harper.]

Orders of the Day — ROAD SCHEMES (BRENTFORD AND CHISWICK)

Motion made, and Question proposed. That this House do now adjourn—[Mr. Harper.]

11.58 a.m.

Mr. Michael Barnes: I am most grateful to have this opportunity to raise the subject of the effect on the environment of current road proposals for Brentford and Chiswick. Brentford and Chiswick are two distinct communities which have managed to retain their identity and character to a surprising degree amidst the sprawl of West London. They form a very compact area which is only about three miles long from east to west, and of irregular width but, on average, about 1½ miles


from north to south. The effects of the road proposal which I am now going to mention are giving great concern to my constituents, a concern which, I hope to show, is fully justified.
The first and most important road in question is Ringway 2. The G.L.C. has not yet announced the route for this section of Ringway 2, but it is clear from the Greater London Development Plan maps that, somehow, it has got to join up Barnes Bridge with the Chiswick roundabout and it is known to favour a route which would mean Ringway 2 going through the Grove Park area of Chiswick.
The second scheme is the Great Chertsey Road which is due to be brought up to motorway standard as part of the same primary road network as Ringway 2.
The third and fourth schemes are the widening of Chiswick High Road to make it a dual 22 ft. carriageway and the realignment of the A.315 through Brent-ford. Both of these are Hounslow Borough schemes.
The fifth scheme is the Sutton Court Road underpass. This is a Ministry scheme in connection with which a public inquiry was held last month.
The sixth proposal is for there to be a motorway link from Willesden down through Acton to the Chiswick roundabout. The seventh one is for there to be an additional elevated section of the M4 to provide more lanes for that motorway. These two proposals may be beyond the immediate planning horizon, but the fact that plans do exist for them means that they must be considered in this context.
Finally, there is also even a scheme to put some underground car parks under Turnham Green and Chiswick Common despite the fact that both are protected from enclosure and despite the very strong feelings there are among many local residents that these proposals could not possibly be carried out without seriously detracting from the amenities which those open spaces provide.
My main argument is that there is insufficient co-ordination between the Ministry, the Greater London Council and the Hounslow Borough Council on these schemes, and, if they go ahead on the present piecemeal basis, the whole

character of Brentford and Chiswick will virtually be destroyed and the place will become a concrete jungle.
There are a number of specific important points which must be made. By far the most significant of these proposals is Ringway 2. The Greater London Council have not yet had the courage to publish the route for this section of Ringway 2, despite an assurance given in the summer that this would be done by the end of July. Perhaps this is because of the growing very great opposition among my constituents to the route through Grove Park which the G.L.C. is known to favour, opposition which I fully share. If Ringway 2 were to go ahead, in whatever form, by whatever route, it would affect the whole traffic pattern for the area, and, therefore, it is my view that none of these other schemes should go ahead until the question of the Ring way is settled.
There is no case for proceeding with the Sutton Court Road underpass in advance of a decision on Ringway 2. The Ministry says that the purpose of this scheme is to keep traffic flowing freely along the A4, but the delays caused at the Sutton Court Road traffic lights are minimal, and they are a useful way of checking traffic and preventing it from piling up at other congested points on the way into Central London.
The widening of Chiswick High Road is proposed so as to increase its capacity to feed the Chiswick roundabout, which is the junction for the M4, the A4, and the North Circular Road. Apart from the fact that this would transform what is now a very pleasant shopping centre, it makes no sense to go ahead with this proposal before a decision is taken on Ringway 2 and before we know what are the likely traffic flows for the area.
The realignment of the A315 is part of the Hounslow Council's plan for the Brentford riverside area, and the Minister's decision has been awaited for some time. The indications are that it is the difficulties in connection with this road that are delaying the decision. The Council proposes to close Brentford High Street, the present A315, to through traffic, and to build this new road from Kew Bridge, taking it between Brentford High Street and the Great West Road right through to Busch Corner. The Council wants to start construction at the


Kew Bridge end as soon as possible. But supposing, for the sake of argument, that a modified Ringway 2, instead of going through Grove Park, were to come over the river by Kew Bridge and go into an intersection in Brentford Market, where would this leave the new A315? The Hounslow Council seems to be rather cynical about Ringway 2. Perhaps, like many of us, the Council believes that it will never happen. It appears to take the view that it is right to go ahead with the new A315 and, if it has to be altered at a later date to fit in with the larger and more important roads, so be it. This shows a lack of co-ordination, and the realignment of the A315 is another proposal which should await a decision on Ringway 2.
I go further than that on the question of the A315, although the proposal is in a very advanced stage. I am not convinced that this new A315 is needed at all. Either the A4 could be made to do the relief road job or, alternatively, it might be better to keep Brentford High Street open to through traffic, although separating the traffic from the shopping area, which could be linked by walkways to the town quay area.
As for the motorway link coming from Willesden through Acton down to the Chiswick roundabout, and the possible additional elevated section of the M4 to provide more lanes, these are both absolutely appalling prospects. It is no answer to say that they are beyond the present planning horizon and that we therefore have no need to worry about them. If plans exist for these roads, no matter in how tentative a form, the time for those plans to be considered is now. There is insufficient co-ordination on these roads between the Ministry, the Greater London Council and the Hounslow Borough Council. I therefore ask my hon. Friend if he is prepared to set up a special study into the effect of all the roads that I have mentioned on the environment in Brentford and Chiswick? I hope that my hon. Friend will give me a specific answer on this. More and more people in Brentford and Chiswick are coming to the conclusion that the only way in which these plans can be brought together and developed sensibly, so as to preserve the character of Brentford and Chiswick, is for somebody to look at the total effect of all the proposals together,

even though some of the proposals may not be his concern. Some of these proposals are G.L.C. schemes, some are Hounslow Borough Council schemes and some are Ministry schemes, and the difficulty that we are up against in trying to raise this matter with the authorities involved is that it is hard to interest those authorities in schemes which are not their schemes. The Minister is the only person in a position to look at all the schemes together, and I therefore ask him to set up this special study into the effect of all the schemes on the environment of Brentford and Chiswick.
I had hoped to be able to interest the Secretary of State for Local Government and Regional Planning in this matter, but he has said that, in view of the important general responsibilities which the Prime Minister has given to him, he cannot deal with particular Ministry of Transport cases and particular Ministry of Housing cases. But surely environment is not a general concept which can have a separate existence from transport, housing, or planning. To treat environment in this way is to make meaningless the Prime Minister's proposals for setting up this new super-Ministry.
If one has a responsibility to consider environment, sooner or later one must come down from looking at the important general responsibilities to examine the particular problems in particular areas. Brentford and Chiswick may be a small place, but it is a good example of the whole problem of roads versus environment. The scale of what is proposed for Brentford and Chiswick is such that, if it goes ahead, it will change the whole character of the environment of the area.
People in Brentford and Chiswick have been greatly encouraged by the setting up of the new super Ministry, of which they have high hopes. They see the road proposals for their area as an ideal test case for the new Ministry. I conclude by making the important point that I am asking my hon. Friend to meet the anxieties of my constituents by setting up a special study into the effect of all the road proposals which I have mentioned on the environment of Brentford and Chiswick.

12.10 p.m.

The Joint Parliamentary Secretary to the Ministry of Transport (Mr. Albert Murray): I apologise to my hon. Friend


the Member for Brentford and Chiswick (Mr. Barnes) for puffing my way into his speech. This was due to London's traffic problems, and I apologise sincerely.
Every road scheme, however big or small, wherever it is, has implications for the environment. The particular difficulties will differ from scheme to scheme and from area to area. But they are always there and cannot be dealt with in isolation from the many other factors which must be taken into account in the planning process.
In complex traffic situations such as in London highway authorities have a difficult problem in weighing what they might consider as desirable in an ideal world against what can be regarded as reasonably practicable in the real world when there are constraints on time and resources. Many compromises have to be made. But the aim must always be to ensure that compromises are made in the light of all the relevant factors. The local borough is best fitted to judge the local implications, and in the case of Brentford and Chiswick the Greater London Council must take an overall view and consider the wider issues.
Each highway authority has a role to play and co-ordination and co-operation between authorities is vital. It is not difficult to point to examples of past mistakes where roads have been built without proper regard to their overall environmental implications or their effect on surrounding communities. It is important that we learn from these mistakes and ensure that they are not repeated.
Although urban motorways and similar major roads are beginning to appear on a significant scale throughout the country, our experience of the special problems of fitting these major new structures into the urban environment is still relatively small. We need to learn as much as we can about these problems so that in future the urban roads can be planned on a basis of firm knowledge about their effects. It is for this reason that my right hon. Friend in July set up the Urban Motorways Committee, which is carrying out a detailed study of the problems of fitting major roads into urban areas, with the aim of determining how they might be better related to their surroundings physically, visually and socially. I am

sure my hon. Friend will agree that it is not only valuable that the Committee has been set up, but also that its aims and objectives are most important. It is undertaking a major task, which will not be completed for some time.
Practical studies are also to be undertaken by the Greater London Council in North-East London to demonstrate the feasibility of their road strategy in relation to the environmental objectives of the Greater London Development Plan. It is hoped that this study will be completed in time for the inquiry into the Plan. All this will help to ensure that future road schemes can be planned on a firmer basis of practical knowledge about the wider social and environmental implications than is at present the case.
A great deal of attention is being paid to co-ordinating road schemes, particularly in London. There is close consultation between my Department and the Ministry of Housing and Local Government on the planning implications of transport proposals. For example, my hon. Friend will be interested to hear that at a recent public inquiry into a London road-widening scheme with special planning and environmental aspects my right hon. Friend the Minister of Housing and Local Government provided an assessor to assist the Ministry of Transport inspector in dealing with evidence on these aspects.
In London the Greater London Development Plan, about which I will say a few words later, will provide the main instrument for co-ordination in the long term, while co-ordination in the shorter term is already being carried out by the Joint Highway Planning Committee of the Transport Co-ordinating Council for London within which Ministry and G.L.C. officials work closely together. In the final analysis my right hon. Friend the Minister of Transport can exert a considerable co-ordinating influence on major local authority schemes through his power to give or withhold grants.
My right hon. Friend the Secretary of State is concerned with the general issues of environmental planning in which the planning of new roads forms an important part. He has said that he proposes to consider whether present arrangements provide an adequate framework for


proper environmental planning. This we shall do.
I have been talking in general terms because my hon. Friend made specific criticisms of the existing planning machinery. I should now like to take a closer look at the situation in London itself. The Greater London Development Plan provides an opportunity to look at major road proposals over the whole of Greater London and to consider them both in relation to each other and to other policies and proposals in the Plan. The Greater London Council has submitted this plan to my right hon. Friend the Minister of Housing and Local Government in accordance with the requirements of the London Government Act, 1963. He has made it clear that the fullest opportunity will be given for reviewing all the policies and proposals in this important plan, not least the road proposals. He has given full assurance that the economic, social and other aspects will come within the scope of any inquiry into the plan. In short. the plan provides a vital instrument for co-ordination in the long-term of major road proposals and other aspects of transportation policy.
The present planning of roads in London is based on the concept of developing a hierarchy of roads to serve different purposes. At the top of this hierarchy, the Greater London Council is proposing to establish a clearly defined network of primary roads. Many of them will be purpose-built, high-capacity, limited-access motor roads whose function will be to serve the needs of longer distance traffic—in London, this means journeys of over four miles—thereby relieving local roads so that they can better serve the needs of local traffic. The triple Ringway system, which has been proposed by the G.L.C. as the main framework of the future primary road network is planned specially to make orbital journeys easier than at present, thus relieving Central London of through traffic and providing good access to and from the national trunk road and motorway system.
The primary network will be supported by a less well-defined and much larger network of secondary roads. Many of these will be important traffic routes, but

their main function will be to cater for shorter journeys and to act as feeder routes to the primary system.
At the bottom of the proposed hierarchy come the district roads, whose functions will be to serve purely local access and distribution needs. They will not cater for through traffic.
What appears to give most concern to my hon. Friend and his constituents is the possibility of Ringway 2 passing through Chiswick. This is a Greater London Council proposal and, as yet, no plans have been published for any route through Chiswick. The Greater London Development Plan indicates the possibility of such a route by means of two arrows pointing along a south-east/north-west axis across Chiswick to Barnes. In the terminology of the Greater London Development Plan road map, this means that alternative possibilities for a route along that corridor are under consideration but that no preferred alignment has yet been chosen.
Whatever alignment between those two points might be chosen, the understandable fear of people in Chiswick is that any new motorway cutting across the two existing major radial roads in the area, the A4 and the A316, would result in a tight triangle of primary roads which, by their very nature, would radically change the character of the immediate area. Whether such changes would be justified in the interests of the future development of London as a whole is a question which can be properly considered only in the wider context of the proposals and policies in the Greater London Development Plan.
My hon. Friend will appreciate that the Greater London Development Plan will provide an opportunity to consider major roads in Brentford and Chiswick as a whole and that the Urban Motorways Committee is undertaking studies of the environmental problems of major new roads. Knowledge from these studies will be available to the planners of new motorways or future major roads in Brentford and Chiswick.
As I said earlier, I recognise that any road scheme, however big, has implications for the environment. The schemes which I have just mentioned obviously are no exception. However, I hope that


I have been able to convince the House that we are not turning a blind eye to the vital issues for the future of London's environment.

Mr. Barnes: rose—

Mr. Speaker: Order. The hon. Gentleman has exhausted his right to speak, but he can intervene before the Minister sits down.

Mr. Barnes: Thank you, Mr. Speaker. Before my hon. Friend sits down, will he answer the specific question which I put to him? Will he agree to set up in his Ministry a special study into the effect on the environment in Brentford and

Chiswick of all the road schemes which I mentioned?

Mr. Murray: I do not think that I can offer to do that. My right hon. Friend the Secretary of State is responsible for the environment of the whole country. I do not think that we can set up any special study related to Brentford and Chiswick. But certainly I undertake to ask him that very point, and I promise to give my hon. Friend an answer about it.

Question put and agreed to.

Adjourned accordingly at twenty-five minutes past Twelve o'clock.